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Gold Higher On Bargain Hunting, Weaker U.S. Dollar Index

(Kitco News) - Gold prices ended the U.S. day session with moderate gains Thursday, boosted by bargain hunting and by a lower U.S. dollar index. The overall near-term chart posture of the gold market remains in favor of the bulls, which continues to invite technically inspired buying. April gold was last up $10.10 at $1,350.40 an ounce. Spot gold was last quoted up $13.60 at $1,351.00. May Comex silver last traded up $0.303 at $21.542 an ounce.

U.S. economic data released Thursday included the weekly jobless claims report, the Challenger job cuts report, manufacturers’ shipments and inventories, and ICSC chain store sales trends. Taken together, this data once again favored the weak side of market expectations. That was also a bullish underlying factor for the precious metals Thursday. It begs the question: Will Friday’s all-important U.S. jobs report also favor the weak side? If so, that would also be bullish for the metals and for the raw commodity sector, in general. It would hint that the Federal Reserve may not be as aggressive in winding down its quantitative easing programs in the coming months. The forecast is for the key non-farm payrolls figure of the jobs data to come in at up 150,000 in February. Any reading that deviates significantly from that forecast is likely to move the markets. In recent weeks, U.S. economic data has mostly missed the pre-report forecasts and have been on the weak side of those forecasts.

Gold also got a lift Thursday from less-dovish comments from European Central Bank president Mario Draghi, at his press conference following the ECB monthly meeting. His remarks lifted the Euro currency, which in turn supported gold and pressured the U.S. dollar index. The ECB did not make any significant monetary policy moves Thursday. None were expected given some recent, generally upbeat economic data coming out of the European Union.

The situation in Ukraine has for now changed from a serious geopolitical matter to more of a regional issue of lesser significance—from a market place perspective. This has been bullish for world stock markets and bearish for safe-haven gold, the U.S. dollar and U.S. Treasuries.

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The London P.M. gold fix is $1,345.25 versus the previous P.M. fixing of $1,337.00.

Technically, April gold futures prices closed nearer the session high Thursday. A two-month-old uptrend is in place on the daily bar chart. Bulls have the overall near-term technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at this week’s high of $1,355.00. Bears’ next near-term downside breakout price objective is closing prices below solid technical support at last week’s low of $1,318.70. First resistance is seen at $1,355.00 and then at $1,360.00. First support is seen at $1,345.60 and then at $1,340.00. Wyckoff’s Market Rating: 6.5

May silver futures prices closed nearer the session high Thursday and scored a bullish “outside day” up on the daily bar chart. The bulls and bears are on a level near-term technical playing field. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the February high of $22.215 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $20.63. First resistance is seen at Thursday’s high of $21.65 and then at this week’s high of $21.74. Next support is seen at $21.25 and then at last week’s low of $21.025. Wyckoff’s Market Rating: 5.0.

May N.Y. copper closed up 110 points at 321.40 cents Thursday. Prices closed nearer the session high today on short covering. Prices remain in a choppy nine-week-old downtrend on the daily bar chart. Bears still have the near-term technical advantage. Copper bulls’ next upside breakout objective is pushing and closing prices above solid technical resistance at 326.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the November low of 315.00 cents. First resistance is seen at 322.20 cents and then at this week’s high of 323.55 cents. First support is seen at 320.00 cents and then at 317.75 cents. Wyckoff’s Market Rating: 3.5.

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